The most likely price direction for the foreseeable future is bearish until the next recession hits. While chart analysis can be a good indication of price movement, I think looking at the macroeconomy can provide us with a better picture of where BTC will end up in the next 6 months. I'll be examining both, starting with chart analysis and then factors beyond the chart.
The downward trend is still in play and the previous 6 candles indicate price weakness and inability for bulls to break above $8000 (see red curve). The best-case scenario for BTC is sideways movement. If BTC does break down, I expect the bottom price to be around $3000 to $4000 range. The halving event in 2020 may increase price, but as we saw with Litecoin's halvening, price is not guaranteed to increase. This indicates that there are other stronger factors on cryptocurrency prices.
I think the strongest factor on crypto prices, and the strongest case for the bear position, lies in what is happening in the stock market. The Feds have been pumping billions of dollars into the banking system in an unofficial QE4 since September 2019, with the effect of causing asset inflation in the US stock and bond markets. Weakness in European and Latin markets, and negative interest rates in the EU and Japan, is causing foreign money to flow into the US stock markets. Blue-chips are basking in a neverending torrent of index fund money as more and more middle-class Americans dump their retirement into indexes. If Congress furthers lowers corporate taxes, expect more stock buybacks. All these factors mean US stocks and bonds will continue to rise for the foreseeable future.
The effect on crypto cannot be more profound. The continuous rise in US stocks means new money will be chasing higher returns in stocks and US Treasuries instead of investing in crypto. I think the bull can only return to crypto when two things happen:
1. The vast majority of current and previous crypto investors (over 95%) are not paying attention to the crypto markets.
2. The current stock market bubble bursts and heralds the end of dollar dominance (or a near-death experience for the dollar).
Overall, I hope you liked this analysis or at least thought this analysis thought-provoking. If you have anything else to add, please leave a comment.
The downward trend is still in play and the previous 6 candles indicate price weakness and inability for bulls to break above $8000 (see red curve). The best-case scenario for BTC is sideways movement. If BTC does break down, I expect the bottom price to be around $3000 to $4000 range. The halving event in 2020 may increase price, but as we saw with Litecoin's halvening, price is not guaranteed to increase. This indicates that there are other stronger factors on cryptocurrency prices.
I think the strongest factor on crypto prices, and the strongest case for the bear position, lies in what is happening in the stock market. The Feds have been pumping billions of dollars into the banking system in an unofficial QE4 since September 2019, with the effect of causing asset inflation in the US stock and bond markets. Weakness in European and Latin markets, and negative interest rates in the EU and Japan, is causing foreign money to flow into the US stock markets. Blue-chips are basking in a neverending torrent of index fund money as more and more middle-class Americans dump their retirement into indexes. If Congress furthers lowers corporate taxes, expect more stock buybacks. All these factors mean US stocks and bonds will continue to rise for the foreseeable future.
The effect on crypto cannot be more profound. The continuous rise in US stocks means new money will be chasing higher returns in stocks and US Treasuries instead of investing in crypto. I think the bull can only return to crypto when two things happen:
1. The vast majority of current and previous crypto investors (over 95%) are not paying attention to the crypto markets.
2. The current stock market bubble bursts and heralds the end of dollar dominance (or a near-death experience for the dollar).
Overall, I hope you liked this analysis or at least thought this analysis thought-provoking. If you have anything else to add, please leave a comment.